More than just the tipping point: Tax savings ensure untarnished returns for commodity investors

Prices for technology metals and rare earths are currently rising, which is why many investors sense the prospect of high returns in production-critical raw materials. The growth potential of these physical assets is comparable to that of shares. In addition, taxes can be saved on the sale of technology metals and rare earths under certain conditions.

Private investors usually do not have to pay tax on their profits from the sale of technology metals, rare earths, gold, and silver. The condition for this is that it is a private sale transaction and the holding period of the goods is at least one year.

A simple model calculation shows that this pays off if sold after around 20 years: 7.5% returns are currently a realistic forecast for both shares, including dividends, and physical assets such as gold. With an investment sum of 50,000 euros, without allowances and with the usual tax rate of 26.3% for capital gains, a share investor would have 156,373 euros after this time. However, someone who has invested in physical commodities could enjoy 212,393 euros. The commodity investor would therefore have made around 56,000 euros more profit!

Furthermore, to reach the 156,373 euros accumulated by the stock investor in 20 years, the commodity investor would only have needed slightly more than 15 years.

Thus, it can be noted that shares must generate much higher returns to compensate for the tax advantage of physical commodities.

According to this calculation, technology metals and rare earths would only need a return of 5.8% to be on a par with shares. Conversely, the stock return would have to show a price gain of 9.1% to be equal to commodities after 20 years.

You can also save on taxes when storing production-critical commodities. Commodity traders such as Noble BC use duty-free warehouses so that VAT is completely eliminated and the entire commodity investment process is exempt from taxes.